Johann Rupert’s investment holding company Remgro rewarded shareholders with a special dividend after Heineken Beverages bounced back to profit.
Shareholders in the group are sitting pretty after Remgro declared a 200c special dividend and hiked its ordinary annual dividend by 30% to 344c.
Remgro shares closed just more than 1% higher at R175.59 on the JSE on Tuesday, having gained 14.8% so far this year.
Heineken Beverages, nearly a fifth of which is owned by the billionaire’s investment outfit, reported improved volume growth and margin recovery, restoring faith in the unit after a rocky start to its SA operations.
Remgro’s investment in the group is finally paying off, with the brewery contributing R406m to its annual headline earnings this year. This comes after an R11m loss in the first half and a R386m loss in the 2023 financial year.
Earlier this year Remgro had bemoaned Heineken’s “own goals” on pricing ahead of its 2023 tie-up, in which Heineken SA, Remgro-owned Distell and Namibia Breweries merged to form Heineken Beverages.
The SA operations had high hopes for the local market, aiming to capitalise on the cache of names including Amstel, Savannah, Amarula and Heineken Silver. Within a year of the deal, however, Heineken wrote down the value of its SA business by R10bn as the company’s premium brands struggled to compete with cheaper products from competitor SA Breweries (SAB), such as Carling Black Label and Castle.
Remgro reported a stronger financial performance with headline earnings soaring 38.6% to R7.83bn for the year ended June, or R14.09 per share.
The group benefited from stronger performances across its retail, healthcare and insurance assets. Mediclinic added R362m to annual headline earnings, Outsurance R318m, Rainbow Chicken R324m and RCL Foods R264m.
Remgro’s intrinsic net asset value per share (iNAV) was up 16.5% year on year at just shy of R300. Its closing share price at end-June was R158.20, a 46% discount to the iNAV.
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